Newspaper Ads Claim CU Connection, But There Isn't One

Newspaper advertisements that allegedly mislead consumers into thinking that special customer appreciation sales were linked to area credit unions were pulled after threats of legal action by the Wichita deputy district attorney.

Jamie Varbel, director of marketing and communication for the Kansas Credit Union Association, told The Credit Union Journal that two area dealers implied a connection with area credit unions in local newspaper and onsite billboard ads for car sales specially for "credit union members."

In one ad for a 10-day "customer appreciation sale," the names of 22 credit unions and "all medical credit unions" were listed. It offered a free gift and special prices with proof of CU membership.

Officials of several of those credit unions named found out about the sale only after members tried to get pre- approval or loan approval to purchase vehicles at what they thought was a credit union-sanctioned event.

Credit unions, in fact, had never been contacted by the dealers and had no connection to the sales, Varbel said. KCUA officials suspected the dealers were luring members in to purchase vehicles and offering them only their own financing.

A second ad was designed to look like a newspaper article and boasted that "this year's official credit union event" had vehicles in every price range with rates as low as 4.9% APR. A sentence in bold letters appeared twice within the three column copy block-"As an introductory offer these rates and the special pricing will be made available to the public as well as credit union members."

Varbel said the ads were wrought with red flags. For example, she said, one of the CUs named was Kansas Corporate and "everybody within the industry knows that corporates aren't involved in these types of events."

A separate direct mail piece used letterhead from Credit Union Services of America, similar to Credit Union of America, a $151-million CU in Central Kansas, she said.

Besides being deceptive, Varbel said, Kansas law prohibits anyone not legally connected with the industry from using the words "credit union."

When phone calls by KCUA officials to the dealerships-Mike Steven Motor Group and Mel Hambelton Ford-were not returned, the association went to the Attorney General's office to file an official complaint.

When attorneys for KCUA and Credit Union of America-one of the CUs listed in the ad-contacted dealership owners of Mike Steven Motor Group and Mel Hambelton Ford threatening to sue, the ads were pulled and the issue quickly resolved.

Varbel said the KCUA took action to protect members, preserve its "good reputation" and make sure any endorsements by credit unions benefit their members.

Marla Marsh, president of the KCUA, earlier told reporters that the association planned to work with local dealers to prevent future occurrences of this kind.